Friday, July 29, 2011

The Grand Mistake

The Tea Party Republicans are on the verge of making a Grand Mistake in the debt ceiling debate. It’s the same Grand Mistake of those they beat in the 2010 elections – they are overestimating their mandate.

Tea Party candidates were voted into office primarily to bring fiscal sanity to Congress, not to enable a government default.

As exaggerated a problem as a “default” has become (does anyone really care what S&P thinks anyway?), it remains a significant political liability for Republicans (Tea Party members in particular) as the President and his cabinet would decide who gets paid and who doesn’t. President Obama has already made it clear that this will be purely political decisions (i.e. withholding Social Security checks, not paying the troops and veterans, etc.) rather than reasonable decisions in the face of a crisis. This result would certainly lead to major Tea Party and Republican losses in 2012 as the narrative will undoubtedly blame the Tea Party for not compromising and causing the default (an unfair, yet inevitable, narrative in our view – in reality, this crisis is 20 years in the making and everyone shares the blame).

Change cannot happen overnight in a divided Washington. The greatest gift a Tea Party member of Congress could give their constituents would be an advancement of fiscal conservatism in a responsible and realistic manner. As voters come to appreciate the virtues of fiscal conservatism, this effort will pave the way for like-minded candidates to be successful in other districts/states, and will ultimately result in a greater influence of fiscal conservatism in Washington. Only patient and responsible governing can achieve that goal. Forcing a government shutdown or default might please your base and show that you can "walk the walk", but it will not advance your legislative goals, in fact, there’s a good chance it would kill them.

Hopefully the Tea Party candidates will join their fellow Republicans and pass a bill that raises the debt ceiling in exchange for real cuts in spending in a way that is acceptable to the Senate and the President. It won’t be exactly what they want, but it's a move in the right direction, and most importantly, it will prove to the American people that the Tea Party is reasonable and can govern accordingly.